That's really good advice, thank you! Do you know how long Form 4506 typically takes to process? I'm concerned about having proper documentation before next year's filing.

Form 4506 usually takes about 75 days to process, so it's definitely not a quick solution. That's why I'd recommend trying the certified letter to your accountant first since that would be much faster. For next year's filing, you should be fine even without a full copy of this year's return as long as you have your K-1. However, if you plan to switch accountants, having the complete return will help the new preparer understand your business situation better.

This is super important! My accountant filed my federal S-Corp return but completely forgot about my state filing. Ended up with a $400 penalty that took months to sort out.

Oh no, I hadn't even thought about state taxes! We're in New York - do you know if they follow the federal rules for foreign income or have their own system? This is getting more complicated by the minute.

New York generally follows federal rules for income inclusion, so if you're reporting the rental income on your federal Schedule E, you'll need to include it on your NY return too. The one benefit is that NY does allow credits for foreign taxes paid, similar to the federal system. Some states like Nevada or Florida might be more advantageous for people with significant foreign income since they don't have state income tax. But for now, plan on reporting that Belgian rental income on both federal and NY returns.

Good point! Though I think Form 8833 is only required if you're taking a position that's contrary to the treaty or if you're claiming the treaty overrides an internal US law. Not everyone with foreign property needs it.

That's a really good point I hadn't considered. My Bitcoin interest is coming from a centralized exchange (just a basic interest account), but I also have some ETH in DeFi protocols. Do you think the source matters that much for potential wash-sale considerations?

The source could definitely matter. Centralized exchange interest accounts are pretty straightforward - they're clearly interest, similar to a bank account. DeFi gets murkier because sometimes you're technically swapping your asset for a derivative token (like depositing ETH but receiving aETH or similar). In traditional finance, if you exchange one security for another that's considered "substantially identical," it can still trigger wash-sale rules. So if crypto wash-sale rules get implemented, there might be questions about whether your original ETH and the derivative token you receive are "substantially identical" for tax purposes.

Actually, the Infrastructure Bill from last November did include some retroactive tax reporting requirements for crypto. So it's not impossible for them to do retroactive changes, especially for "clarifications" of existing rules rather than completely new taxes.

That's not correct. You can't deduct personal auto loan interest on your taxes. Home mortgage interest yes, but not car loan interest unless the car is used for business purposes. Even then, you'd need to deduct only the business percentage. Please don't spread misinformation.

You're right, I was confusing it with mortgage interest. I was thinking about business vehicles where you can deduct the interest as part of your business expenses if you use the actual expense method. Thanks for the correction - definitely don't want to give bad advice!

Good point! I live in Colorado and we have special credits for certain vehicles. Always worth checking your specific state tax rules since they vary so much.

Thanks for mentioning this! I didn't even think about state-specific tax benefits. I'm in Pennsylvania - anyone know if there are any vehicle-related tax benefits here? I'll definitely look into it.

Would this also happen if you worked in multiple states during the year? I moved mid-year and worked in both California and Oregon, and my refund was way off from the estimate too.

Yes, working in multiple states can definitely cause this situation! Each state's employer might withhold without knowledge of your income in the other state. Also, states have different tax rates and credits, which complicates things further. When you move mid-year, you typically file partial-year resident returns in both states, and the tax software sometimes struggles to accurately estimate refunds in these complex scenarios. Withholding calculations don't always properly account for the fact that you'll only be taxed on income earned while a resident of each state, leading to overwithholding.

This happened to my neighbor too! The state actually garnished his wages when he didn't pay back an erroneous refund fast enough. Did your dad have to pay penalties too or just interest?